Nigeria Now the Worlds Second largest Crude Exporter Behind Saudi Arabia

Nigeria has been ranked above Iran as the second largest crude oil exporter in the world after Saudi Arabia. The ranking was contained in a report released by the Organisation of Petroleum Exporting Countries (OPEC) in its 2010 report published recently.

The ranking has attracted concerns both from Iranian and Nigerian oil officials, painting divergent views on the issue.

OPEC’s Annual Statistical Bulletin published last week says Nigeria shipped 2.464 million barrels a day last year, followed by Iran with 2.248 million barrels.

According to the report, Iran’s refining capacity rose by 18 percent last year, the biggest gain among OPEC’s 12 members, the report showed.

The report continued “Energy companies in Nigeria stepped up oil output as militant attacks on installations in the Niger River delta dropped after a government amnesty to fighters in late 2009, the Department of Petroleum Resources said. Nigeria’s oil exports rose 46 percent to 9.15 trillion naira ($59 billion) last year, the National Bureau of Statistics said in April.”

But Iran’s OPEC governor Mohammad Ali Khatibi said OPEC rationing is based on production, not export, and Iran still holds the second-largest OPEC producer status and no change has happened in this regard.

Also reacting to the report, the spokesperson of the Nigeria’s National Oil Company, Dr Levi Ajuonuma said “statistics don’t lie”, and Nigeria is not the author of the report.

From the economic point of view, there is nothing to worry about by the Iranians because; the statistics are in their favour. The fact that Nigeria had exported more crude oil last year than Iran does not translate to more economic prosperity for the former.

The report indicated that the production of crude oil of Iran was still at the high side only that the export dropped, which means that Iran now demands more of its crude oil at home to take care of its economic growth. This is good news for Iranians because demanding for more crude oil at home is an indication of economic productivity.

The report said the capacity for refineries in Iran expanded within the period to accommodate the excess crude. This signifies that more industrial activities are taking place. In recent times, records have shown that heavy duty industries such as steel, automobile, power, energy and constructions in Iran are doing very well. Such industries demand more fuel and energy to run.

If Iran’s crude can be processed to carter for industry growth in-house, it means there is a sign of economic reliance in the country that is facing political pressure from the western World.

In Nigeria, unfortunately, the story is not the same; the economy can best be regarded as mono-cultural. The country solely relies on crude export, with only four refineries which continue to decline and rot instead of expanding.

Nigeria’s crude oil export must grow, because the industries that demand fuel are closing shops due to lack of good policies and infrastructure. The four refineries have installed capacity of about 445, 000 barrels of oil per day but in more than 30 years, no new refinery has been added.

On the average, 30 million barrels daily consume Premium Motor Spirit known as Petrol but the country couldn’t refine quarter of such amount internally, while other fuels like Duel Purpose Kerosene and Automated Gasoline Oil or Diesel are imported on high demand.

In a nutshell, Nigeria exports majority of its crude oil, and at the same time import refined products, unlike Iran that has enough refined fuel at home and even export some to make more money and revenue.

In view of the global politics of oil and the status of Iran in the western World, it is not surprising when Iran kicked against this simple and straight forward statistic. Iran at the moment is not ready to associate itself with any failure, economically or otherwise.

The Iranians have enormous challenges, because they believe that the whole eyes are on them, therefore for OPEC to bring out such statistic at this moment is not considered a small bash on them.

The argument by Iran’s Khatibi which said Iranian experts had found ambiguities in some of the figures in the OPEC report and thus the experts “did not confirm Nigeria’s export increase.”

“In the report, Iran’s oil income exceeds that of Nigeria in 2010. Then how would it be possible for Nigeria’s oil income to be less than that of Iran despite having boosted its exports?”

With 150 million population as at last count in 2006, the oil and gas industry in Nigeria accounts for about 30 percent of the GDP, 95 percent of total export revenue and around 80 percent of government.

This argument has opened up a can of worms and exposes more of the corrupt nature in managing Nigeria’s oil wealth. Corruption is the key factor that make Nigeria’s oil wealth unbeneficial to its public. It is true in Nigeria, the government has not enough record to present on the amount of oil produced daily in the country. The government only relied on what the oil companies provide to it.

The Nigerian government has no proper checks and balances system to verify the records from the oil companies. The argument by the Iran oil chief testifies to the fact that billions of Nigeria’s oil money get missing before reaching the federation account.

The Nigeria Extractive Industry Transparency Initiative (NEITI) in its reports had several times discovered lots of gaps and missing figures which up till now have remained untraced.

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